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Robbie Bach, the new head of Microsoft’s digital media and entertainment businesses, on Thursday reshuffled the senior management of the division, putting control of the software company’s “digital home” strategy largely in the hands of a group of executives who masterminded the creation of the Xbox video games business.

The appointments mark the first fall-out from a reorganisation in September that gave three executives, including Mr Bach, broader responsibilities to run all of Microsoft’s operations.

The move was intended to cut across the company’s previously balkanised product groups and speed up its push into new markets, such as digital media, where it has lagged behind Apple.

The latest reshuffle includes the elevation of Peter Moore, former head of games and publishing for the Xbox, to overall responsibility for the Xbox business, a position previously held by Mr Bach.

While losses on the Xbox have amounted to more than $4bn, the first generation of the games console has established itself as the closest challenger to Sony’s PlayStation, at least in the US and Europe.

Microsoft hopes to use a new version launched last month to cement its position in the games market and generate a profit.

Another senior Xbox executive, J Allard, has been handed responsibility for the platform technology across the digital entertainment group, making him key in Microsoft’s attempt to create a technological foundation for its broader digital home vision.

Mr Allard first grabbed attention inside Microsoft a decade ago, when he wrote a memo to Bill Gates warning of the threat to the software company posed by the rise of the internet – a memo that helped prompt Mr Gates to revise Microsoft’s strategy.

In a third key appointment, Bryan Lee, the former chief financial officer for the company’s home and entertainment division – which largely comprised the Xbox – has been put in charge of digital music, video and other entertainment operations.